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Board of Trustees of Laborers Health and Welfare Trust Fund for Northern California v. Torres

United States District Court, Northern District of California

November 4, 2014

BOARD OF TRUSTEES OF THE LABORERS HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA; BOARD OF TRUSTEES OF THE LABORERS VACATION-HOLIDAY TRUST FUND FOR NORTHERN CALIFORNIA; BOARD OF TRUSTEES OF THE LABORERS PENSION TRUST FUND FOR NORTHERN CALIFORNIA; and BOARD OF TRUSTEES OF THE LABORERS TRAINING AND RETRAINING TRUST FUND FOR NORTHERN CALIFORNIA, Plaintiff(s),
v.
RENE AMILCAR TORRES, an individual dba VECTOR GENERAL ENGINEERING CONTRACTORS INC, Defendant(s)

For Board of Trustees of the Laborers Health and Welfare Trust Fund for Northern California, Board of Trustees of the Laborers Vacation-Holiday Trust Fund for Northern California, Board of Trustees of the Laborers Pension Trust Fund for Northern California, Board of Trustees of the Laborers Training and Retraining Trust Fund for Northern California, Plaintiffs: Edward Douglas Winchester, Ronald Lee Richman, Susan J. Olson, LEAD ATTORNEYS, Bullivant Hoser Bailey PC, San Francisco, CA.

REQUEST FOR REASSIGNMENT; REPORT AND RECOMMENDATION RE PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT [DOCKET NO. 64]

DONNA M. RYU, United States Magistrate Judge.

Plaintiffs Boards of Trustees for Laborers Trust Funds move the court pursuant to Federal Rule of Civil Procedure 55(b)(2) for default judgment against Defendant Rene Amilcar Torres, an individual dba Vector Engineering Contractors Inc. Mot. [Docket No. 64] at 1. Plaintiffs ask the court to order Defendant to pay unpaid employee fringe benefit contributions and related interest and liquidated damages, and attorneys' fees and costs. The court held a hearing on the motion on October 30, 2014; Defendant did not appear.

Defendant has not filed a consent to the jurisdiction of a magistrate judge pursuant to 28 U.S.C. § 636(c). Therefore, the court requests that this case be reassigned to a District Judge and issues this recommendation that the motion be granted.

I. BACKGROUND

A. Factual Allegations

Plaintiffs are the Boards of Trustees for the Laborers Health and Welfare Trust Fund for Northern California, the Laborers Vacation-Holiday Trust Fund for Northern California, the Laborers Pension Trust Fund for Northern California, and the Laborers Training and Retraining Trust Fund for Northern California (" the Trust Funds"). The Trust Funds, established under Trust Agreements, [1] consist of all employee fringe benefit contributions that are to be made by employers pursuant to collective bargaining agreements. Second Am. Compl. [" SAC, " Docket No. 39] at ¶ ¶ 3-6; Lauziere Decl. [Docket No. 65] ¶ ¶ 10-11, Exs. A-B. The Trust Funds are multi-employer benefit plans within the meaning of sections 3 and 4 of the Employment Retirement Income Security Act of 1974 (" ERISA"), 29 U.S.C. § § 1002, 1003. SAC at ¶ 5.

Vector Engineering Contractors is an employer within the meaning of sections 3(5) and 515 of ERISA, 29 U.S.C. § § 1002(5) and 1145, and an employer in an industry affecting commerce within the meaning of section 301 of the Labor Management Relations Act (" LMRA"), 29 U.S.C. § 185. SAC at ¶ 7. At all relevant times, Torres was and is the sole owner of Vector Engineering Contractors and operated and controlled Vector Engineering Contractors, such that Vector Engineering Contractors and Torres constituted a single employer. Id.

By virtue of his membership in the Engineering and Underground Contractors Association (" EUCA"), Torres became bound to a written collective bargaining agreement with the Northern California District Council of Laborers (" Laborers Union") entitled the Laborers' Master Agreement for Northern California (" Master Agreement"). SAC at ¶ 9; Lauziere Decl. at ¶ 16, Ex. G. In agreeing to be bound by the Master Agreement, Torres further agreed to be subject to and bound by all provisions and conditions of the written Trust Agreements which established the Trust Funds. SAC at ¶ 9.

The Master Agreement requires that employers pay contributions to the Trust Funds for each hour their employees work as laborers. Lauziere Decl. at ¶ 16, Ex. G. Employers are required to pay the employee fringe benefit contributions on or before the 25th day of the month immediately succeeding the month in which the employee's work was performed. An employer who fails to make the required contributions on or before the 25th day of the month is subject to interest on the delinquent contribution at a rate of 1.5% per month, as well as liquidated damages, which are set at $150 for each delinquent contribution. SAC at ¶ 10; Lauziere Decl. at ¶ 16, Ex. H (Liquidated Damage Program - Board Policy); Ex. G. The Trust Agreement permits Plaintiffs to file a lawsuit to recover payment of delinquent contributions and all attorneys' fees and costs incurred. SAC at ¶ 10; Lauziere Decl. at ¶ 13, Ex. D.

Plaintiffs assert that they have performed all conditions required of them by the Master Agreement. SAC at ¶ 12. Plaintiffs allege that Defendant has failed to meet all of his obligations by failing to report and by failing to pay all employee fringe benefit contributions for the periods December 2009, December 2010, and December 2011 in the principal amount of $35, 354.23, and by failing to pay interest and liquidated damages on the unpaid and delinquent employee fringe benefit contributions for those periods. SAC at ¶ 13.

Plaintiffs filed the current action on May 22, 2012 pursuant to section 301 of the LMRA (29 U.S.C. § 185), and sections 502(a)(3) and 502(e)(1) of ERISA (29 U.S.C. § § 1132(a)(3) and 1132(e)(1)), to recover due and unpaid benefit contributions, interest, liquidated damages, attorneys' fees, and filing costs, and amended their complaint twice. SAC at ¶ 1; see also Docket Nos. 1, 11.

B. Procedural History

Plaintiffs initially filed suit against Vector General Engineering and Rene Torres in his capacity as an officer of Vector General Engineering. Docket No. 1. After Plaintiffs served the summons and complaint on these defendants, Plaintiffs requested that the clerk enter default against them; the clerk did so. Docket Nos. 5-8. Subsequently, Plaintiffs lifted the entry of default against these defendants and filed a First Amended Complaint, because Plaintiffs discovered that the above defendants had been erroneously sued, as Torres had signed the Master Agreement on behalf of a different entity, Vector Engineering Contractors Inc. Docket Nos. 11, 17. The First Amended Complaint named Torres dba Vector Engineering Contractors Inc. as Defendant. Docket No. 11.

For several months after Plaintiffs filed the First Amended Complaint, the parties attempted to resolve their dispute informally. Docket No. 25. Torres agreed to submit to an audit, and Plaintiffs moved for and received the court's permission to file the SAC to include the amounts owed to Plaintiffs based on the audit. Docket Nos. 27, 31, 38, 39.

Apparently this first attempt to resolve the dispute informally was unsuccessful, as Plaintiffs filed a motion for default judgment on August 15, 2013. Docket No. 43. The court denied this motion for default judgment because the clerk had not yet entered default against the newly named Defendant. Docket Nos. 45, 48, 52. After the court denied this motion, Defendant contacted Plaintiffs and expressed a willingness to resolve the matter outside of court, and the parties expected to reach a settlement agreement. Docket No. 54. The parties apparently negotiated for several more months but were unable to reach a settlement, and on July 31, 2014, Plaintiffs' counsel filed a motion for entry of ...


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